According to reports from Mint, the SBI Nifty Midcap 150 Index Fund leads the list with the lowest tracking error of 0.05% as of May 29, 2026. Following closely are the ICICI Prudential Nifty Midcap 150 Index Fund and Aditya Birla Sun Life Nifty Midcap 150 Index Fund, both recording 0.06% tracking error. The UTI Nifty Midcap 150 Index Fund and HDFC NIFTY Midcap 150 Index Fund complete the top five with 0.06% and 0.07% tracking error respectively. These funds are all regular plans and data is sourced from AMFI. The Motilal Oswal Nifty Midcap 150 Index Fund Direct Growth has emerged as a strong performer with ₹1,43,825 crore AUM and ₹40.41 latest NAV as of June 2, 2026, ranking #19 in India with 51.27% returns over 5 years. The JioBlackRock Nifty Midcap 150 Index Fund Direct has also entered the market with a 0.13% expense ratio and 0 star rating with 5-year returns at 0.00%.
As reported by Mint, mid-cap index funds replicate the performance of mid-cap indices such as the NIFTY Midcap 150 by holding the same stocks in similar proportions. Mid-cap stocks represent companies with market capitalization between ₹5,000 crore and ₹20,000 crore, ranking from 101st to 250th on stock exchanges based on total market capitalization. These funds provide exposure to mid-sized companies with potential for strong long-term growth, while being passively managed with typically lower expense ratios than actively managed funds.
According to Mint reports, tracking error measures how closely an index fund follows its benchmark index, calculated as the standard deviation of the difference between fund returns and index returns over a specific period. A lower tracking error generally indicates better fund management and more efficient index replication. Since the primary objective of an index fund is to replicate its benchmark, lower tracking error is considered an important factor for investors to consider before investing in mid-cap index funds.
As reported by Mint, investors should consider several factors beyond tracking error when evaluating mid-cap index funds. These include the performance of the mid-cap segment in the broader market, portfolio allocation review of top holdings and weightings, PE ratio valuations of underlying indices, and sector concentration exposure across financials, industrials, and healthcare sectors. The article emphasizes that these factors can influence fund performance and contribute to higher investment risk levels. Additionally, investors should note that fixed deposits offer guaranteed returns while mutual fund investments carry market risks, and tax implications vary based on redemption timing with STCG taxed at 20% for redemptions within 1 year and LTCG taxed at 12.5% for returns exceeding ₹1.25 lakh in a financial year.
